California
Platinum Exchange plan

Platinum offers richest benefits of all Metallic Plans (detail below)
No Subsidy available for Platinum plan (detail below)
Rates and benefits identical in or out of the Exchange
Starting Oct 1st, 2013, you can quote the Platinum Plan (with others) here

We have not seen California
health coverage this rich since...well it's been
over a decade. The California Exchange has
released their basic blue print for the four
different Metallic health plans in California
and at the top of the list is the new Platinum
plan. Let's take a look at the core benefits
and who it might make sense for. We'll also
look at what we expect in terms of pricing which
will be critical. You will be able to
quote the Platinum plan both in and out of
the Exchange here starting October 1st, 2013 for
a Jan 1st, 2014 effective date.

The Core
Platinum health plan benefits

You can find detail
here on the core plan benefits but we'll hit
the highlights below. Keep in mind that this is
the baseline plan provided by the Exchange.
Carriers can have slightly different versions of
it and benefits by 4% but the overall coverage
needs to stay close to the 90% actuarial value
reflected in their baseline plan.

Platinum Plan
Deductible

This is really the big deal
with the Platinum core benefits. There will
likely be no deductible for core benefits or for
medication. We really haven't had a
no-deductible health plans (non-HMO) for years
now due to cost and the effects of years of rate
increases.

Platinum Max
out of Pocket and Coinsurance

The next big important
benefit is the Max out of pocket which sums up
when you can expect covered benefits
(in-network) to go 100% to the carrier. The OOP
(Out of Pocket Max) is listed at $4K which is
better than almost any plan on the current
market. The coinsurance (percentage that you
will pay to meet the max) is 10% which makes the
Platinum California Exchange plan a 90/10 plan.
This is also very rich compared to the current
market.

Office and RX
copays

The plan lists a $25
primary physician visit copays and $50 for
specialists. There are no limits on the number
of visits a person can have. The RX copays are
$5 generic, $15 brand formulary, and $25 brand
non-formulary. Again, there is no deductible
for brand RX which has been the norm on the
market with some of the most popular plans
having very large deductibles. Preventative
benefits will be covered at 100%.

Diagnostic Lab
and X-ray

This is the section that
has seen the most change over the past 5 years
on the California health market with the
popularity and cost of MRI's, Cat-scans, x-rays,
and the like. Labs will be covered with a $25
copay, x-rays will have a $40 copay, and imaging
(MRI's, CAT scans, etc) will be subject to the
10% coinsurance (you pay 10%). This is
extremely rich which brings us to the most
important part of our analysis...what will the
cost be for the California Platinum Health Plan?

The Platinum
Plan Cost

If the past 10 years is any
indication, the Platinum California plan will
not have many takers with one exception...the
very sick. Keep in mind that the subsidies
available in California are only for the Bronze
plan (in-Exchange). No subsidies will be
available for the Platinum plan. The rich
benefits are great but no one will likely pay
the significantly higher premium that is
required. The only people that might are those
with very large medical costs. This attraction
of higher risk is the generally very bad for any
kind of insurance and it even has it's own
technical name (adverse selection). Our
estimate is that the Platinum health plan will
likely make up 3-5% of the new enrollment at
best and we see this dropping with time as a
higher risk pool drives the premiums through the
roof in year two or three. Very quickly the
annual premium difference will more than offset
the best possible benefit difference and the
movement downward in benefits will accelerate.

Either way, you will be
able to quote all the Metallic health plans
including the Platinum, Gold, Silver, Bronze and
Catastrophic (adults under 30) plans with or
without health subsidies starting October 1st
here.